Just do your best to educate yourself in order to mitigate the risks that are involved, run your numbers, and make offers!

(the down payment is completely relevant to the seller)Interest- 7% is pretty standard...it's a premium paid for consideration in carrying the noteAmortization- 30-years is typicalPayment- I would look for the actual P&I based on the amortization schedule, but again, this is relative to the sellerBalloon- 48-60 months is common, and this is completely up to the seller as well (If sellers are leary of the time frame, I always agree to attempt a re-finance sooner...but no guarantees)Some extras:I always pay the listing agent's commision based on the transaction price...otherwise, you can structure a partial commission the first closing and a second commission when the balloon is due...waiting 48-months for the rest of your commission is crazy, thoughWe pay all the doc prep fees (note/mortgage/amortization/assignments/personal guaranty) Typically around $300, so not bad.- use the attorney at title and add it to the HUD-1We use a clause in the note that waives the right to defend a foreclosure in default, so the property returns to the seller without contest (varies from state to state I imagine)We also pay the sellers closing costsAll of this stuff is negotiable...you can always push things with these...like lower the down payment and have the buyer pay all your clients fees and your commission, etc.Give me a shout if you want to chat more about this topic.

Lenders prepaid's or escrow requirements...lender hedging their risk with a requirement for reserves would more than likely be the reason you would need additional cash down...hard to tell without looking at the settlement statement @Alex Alaniz

This does usually result in us using more paperwork/notices than necessary with our tenants, but covers our risk for the most part...generally, the  notices have the actual statutes printed on them and if you read through them thoroughly, states the proper routes to take in different situations and when to use a particular notice. 

Maybe he carries the entire balance, but gets a premium every month based on rents?

Generally I would say that if the property is 15+ years old and not recently completely renovated a SFH would likely be in the range of 50% and a multi unit likely slightly lower, possibly as low as 40%, due to more tenants, higher cash flow and lower risks from vacancies.The 50% guestimate is based on the historic average of hundreds of thousands of rental units of all types over decades of accumulated data.

You become both a better lawyer (because you know the business side of the deal) and better investor (because you know how to play the string out and can allocate risk better than a lay person).

Even if the rent covers the carrying costs he could still get crushed taking into account vacancy and future capital improvements/special assessments.

I carry a higher deductible as it can make the annual premium lower. 

I understand that it may be a ‘soft’ 60 days, but there is risk if over.